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Mondelez International, Inc. (MDLZ - Free Report) is set to report fourth-quarter and 2018 results on Jan 30, after market close. We note that the bottom line surpassed the Zacks Consensus Estimate in the trailing four quarters, the average beat being 2.2%. In fact, the bottom line has been impressive for almost a year. Let’s delve into how things are shaping up for the upcoming quarterly release and see if this food and beverage company can maintain positive earnings surprise streak.

Buyouts & Other Efforts to Build Brands

Mondelez is always keen on expanding its business through acquisitions. In July 2018, the company completed the buyout of 13.8% ownership in the Keurig Dr Pepper business. Prior to this, in June 2018, Mondelez concluded the buyout of Tate’s Bake Shop. Tate’s is one of the fastest growing biscuit brands in the United States and complements Mondelez’s portfolio. In fact, during the third quarter, Tate's Bake Shop contributed significantly toward the top line. Also, in 2018, the company teamed up with Post Consumer Brands, a business unit of Post Holdings (POST - Free Report) , to create two new cookie-inspired breakfast cereals. Further, acquisitions of LU biscuit business and Cadbury are highly significant for Mondelez, as these buyouts helped it expand internationally. The company plans to continue making acquisitions to gain scale in its categories and distribution capabilities.

Mondelez is also committed toward refreshing brand portfolio through product innovation and extending brands to newer geographies and platforms. Further, it is increasing investment toward in-store execution and advertising to support Power Brands. Augmenting digital presence is also a vital strategy for Mondelez to empower brands. In this respect, the company formed strategic partnerships with biggies like Facebook (FB - Free Report) and Amazon (AMZN - Free Report) in the United States. The company believes that e-commerce, its fastest growing platform, can generate $1-billion annual revenues by 2020.

We note that such efficient brand building efforts combined with effective pricing strategies are aiding volume growth across major market regions and product categories. These efforts are likely to boost the company’s performance in the fourth quarter.

Mondelez is taking major steps to enhance productivity savings to boost margins, cash flow and returns on invested capital. Such savings initiatives were a fundamental aspect driving profits in the third quarter of 2018. Additionally, the company is gaining from higher cocoa cost. Moreover, the company continues to strike the right balance between volume and profit through disciplined pricing. Backed by such upsides, the company expects adjusted operating margin to be 17% in 2018, up almost 70 basis points from 2017’s tally. Further, it anticipates double-digit growth in currency-neutral adjusted earnings per share in 2018.

Such aspects boost our expectations regarding a sturdy bottom-line performance in the impending quarter. Incidentally, the Zacks Consensus Estimate for fourth-quarter earnings, which is currently pegged at 63 cents per share, reflects a rise of almost 10.5% from the prior-year quarter’s reported figure. Further, the current estimate has been stable in the past 30 days.

Weak Business Regions & Currency Woes Linger

Operational challenges are limiting Mondelez’s North America business unit. This weighed upon the region’s volumes and revenues in the third quarter of 2018. Although the company is working toward uplifting the region’s performance by investing in improved systems and expansion of capabilities, a turnaround is likely to take time. Moreover, the quarter continued to witness weaknesses in Brazil, thanks to price gaps. Also, management anticipates negative impacts from currency fluctuations in 2018. Such headwinds are likely to impede top-line growth in the upcoming quarterly result. In fact, the consensus mark for revenues for the fourth quarter, which is pegged at $6,772 million, depicts a decline of nearly 2.8% from the year-ago quarter’s tally.

All said, let’s now take a look at the Zacks Model for the upcoming quarterly release.

What the Zacks Model Unveils

Our proven model doesn’t show that Mondelez is likely to beat bottom-line estimates in the upcoming quarterly results. For this to happen, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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